India's growth engine picks pace: GDP expands 8.2% in June quarter, highest in two years
The Indian economy grew 8.2 percent in April-June this year, the highest in three years, amid signs that households are buying more and companies are adding capacities, shrugging off the disorderly effects of the twin shocks of demonetisation and the goods and services tax (GST).
India also cemented its status as the world’s fastest growing major economy, ahead of China, which grew 6.7 percent in April-June 2018. At the current pace, India looks set to become the world’s fifth largest economy, ahead of the United Kingdom.
According to latest World Bank data, India edged past France to become the world's sixth largest economy. India's GDP stood at USD 2.597 trillion (Rs 178 lakh crore) in 2017 in current prices in market exchange rates, ahead of France whose GDP stood at USD 2.582 trillion (Rs 177 lakh crore) in 2017.
Finance minister Arun Jaitley on Wednesday said that India is likely to overtake United Kingdom (GDP USD 2.622 trillion) as the fifth largest economy by next year.
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Latest national income numbers put out by the Central Statistics Office (CSO) on Friday show that gross value added (GVA) in constant 2011-12 prices grew 8 percent in April-June 2018, significantly higher than the last year’s 5.6 percent growth during the same quarter.
GVA, which is GDP minus taxes, serves as a more realistic proxy to measure changes in the aggregate value of goods and services produced in the economy.
The growth in India’s real or inflation-adjusted gross domestic product (GDP) in April-June, however, is also partly because of low growth of 5.6 percent in the same quarter last year, with a favourable “base effect” perhaps magnifying the expansion pace in the broader economy due.
Companies had significantly scaled down production in June 2017 as part of a business strategy to carry over as little old stock as possible into July when GST kicked-in, triggering an unexpected mid-year pre-GST “sale” season on many products at heavy price markdowns.
The manufacturing sector grew 13.5% percent in April-June, from (-) 1.8 percent in the same period last year, mirroring the trends in output activity seen in factory floors.
The index of industrial production (IIP)—the broadest approximation to measure activity across India’s factories—has grown at 5.2 percent during April-June 2018 compared with 1.9 percent in the same period last year.
The growth in the manufacturing sector is also broadly in line with shop-end sales, with car sales reporting record growth numbers, aided by greater disposable income or expectations of higher income in the coming months.
Domestic air passenger traffic, robust rail freight movement, rising sales growth of passenger vehicles and strong consumer durables sales also point to a turnaround in the greater household spending.
The external sector, however, remains a weak link. Merchandise import growth has slowed because of gold imports, while export growth has also weakened.
The agriculture sector grew 5.3 percent, from 3 percent in the same period last year, largely reflecting a strong Rabi or winter sown harvest. The monsoon rains, critical for the summer-sown kharif crop, has been slightly below normal this year so far, particularly in the grain bowl states in north India, but the shortfall isn’t alarming enough to pull down growth in the broader economy.
Construction activity, has also rebounded strongly, growing XXX percent in April-June, from 1.8 percent in the same quarter last year, showing heightened activity in infrastructure, particularly road construction with strong multiplier effects across key sectors such as cement and steel.
First Published on Aug 31, 2018 05:38 pm
TAGS #Arun Jaitley #Demonetisation #Economy #GDP #GST
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The Indian economy grew 8.2 percent in April-June this year, the highest in three years, amid signs that households are buying more and companies are adding capacities, shrugging off the disorderly effects of the twin shocks of demonetisation and the goods and services tax (GST).
India also cemented its status as the world’s fastest growing major economy, ahead of China, which grew 6.7 percent in April-June 2018. At the current pace, India looks set to become the world’s fifth largest economy, ahead of the United Kingdom.
According to latest World Bank data, India edged past France to become the world's sixth largest economy. India's GDP stood at USD 2.597 trillion (Rs 178 lakh crore) in 2017 in current prices in market exchange rates, ahead of France whose GDP stood at USD 2.582 trillion (Rs 177 lakh crore) in 2017.
Finance minister Arun Jaitley on Wednesday said that India is likely to overtake United Kingdom (GDP USD 2.622 trillion) as the fifth largest economy by next year.
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Latest national income numbers put out by the Central Statistics Office (CSO) on Friday show that gross value added (GVA) in constant 2011-12 prices grew 8 percent in April-June 2018, significantly higher than the last year’s 5.6 percent growth during the same quarter.
GVA, which is GDP minus taxes, serves as a more realistic proxy to measure changes in the aggregate value of goods and services produced in the economy.
The growth in India’s real or inflation-adjusted gross domestic product (GDP) in April-June, however, is also partly because of low growth of 5.6 percent in the same quarter last year, with a favourable “base effect” perhaps magnifying the expansion pace in the broader economy due.
Companies had significantly scaled down production in June 2017 as part of a business strategy to carry over as little old stock as possible into July when GST kicked-in, triggering an unexpected mid-year pre-GST “sale” season on many products at heavy price markdowns.
The manufacturing sector grew 13.5% percent in April-June, from (-) 1.8 percent in the same period last year, mirroring the trends in output activity seen in factory floors.
The index of industrial production (IIP)—the broadest approximation to measure activity across India’s factories—has grown at 5.2 percent during April-June 2018 compared with 1.9 percent in the same period last year.
The growth in the manufacturing sector is also broadly in line with shop-end sales, with car sales reporting record growth numbers, aided by greater disposable income or expectations of higher income in the coming months.
Domestic air passenger traffic, robust rail freight movement, rising sales growth of passenger vehicles and strong consumer durables sales also point to a turnaround in the greater household spending.
The external sector, however, remains a weak link. Merchandise import growth has slowed because of gold imports, while export growth has also weakened.
The agriculture sector grew 5.3 percent, from 3 percent in the same period last year, largely reflecting a strong Rabi or winter sown harvest. The monsoon rains, critical for the summer-sown kharif crop, has been slightly below normal this year so far, particularly in the grain bowl states in north India, but the shortfall isn’t alarming enough to pull down growth in the broader economy.
Construction activity, has also rebounded strongly, growing XXX percent in April-June, from 1.8 percent in the same quarter last year, showing heightened activity in infrastructure, particularly road construction with strong multiplier effects across key sectors such as cement and steel.
First Published on Aug 31, 2018 05:38 pm
TAGS #Arun Jaitley #Demonetisation #Economy #GDP #GST
MOST POPULAR
As rupee hits all-time low of 70/USD, these 6 sectors are seen to benefit the most
Surprise exit: Infosys CFO MD Ranganath quits, Narayana Murthy calls it 'irreplaceable loss'
10 points to check before you file your IT returns
